Purchasing & forecasting

Economic order quantity (EOQ)

The order quantity that minimizes total inventory cost by balancing ordering cost against holding cost.

Economic Order Quantity (EOQ) answers 'how much should I order at once?' It balances two opposing costs: ordering too often racks up per-order costs, while ordering too much ties up cash and raises holding costs. EOQ = the square root of (2 x annual demand x order cost / holding cost per unit).

Skuwell factors order economics into replenishment so recommended quantities aren't just 'enough to cover demand' but sensible given your costs and supplier minimums. Our EOQ calculator lets you plug in your own numbers.

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